We have achieved something similar in MOSS, but have used Content Types to
define the document  type. This way, we can define different behaviors
(workflows etc) based  on each type  if needed.

Most importantly, it has allowed us to create  a scope which searches only these
documents and not aspx pages, people and anything else that is being indexed.

We did use multiple  document libraries, but this was only so that we can keep
the contributors separate.

I'm not sure whether all this is possible in WSS, but it should give you a good
idea of what can be done.

We used a combination of document  libraries and metadata to complete a similar
task. The document libraries  group high level categories together. then, we
created views based  on metadata. If you have to manually input metadata for lots
of documents  at once, the best way is to use the "edit in datasheet" action. You
can copy and paste cells for numerous docs at once, instead of manually
inserting metadata a single  instance at a time. create  groups in your views that
allow them to roll up. It will eliminate the need for subfolders.